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Year retrospect Germany

The bankruptcy of Karstadt, the end of Bread & Butter, and the entry of Chinese companies were some major headlines that dominated in Germany, writes Regina Henkel.

Both a plethora of problems and a number of new developments made the fashion headlines. The exhibition landscape changed significantly, and retail continues to be challenged by the ever-growing relevance of e-commerce. And while classical retail is trying to stabilise its business, online giants are battling against each other.

The bankruptcies

Almost a permanent fixture in the headlines was department store group Karstadt. The bankruptcy of the Arcandor mother company, which itself went insolvent six years ago, will still take “many years” to find its footing again, the liquidator said in November, according to the German Press Agency. The reasons were mainly litigations, including those against numerous former managers of the group, like former top executive Thomas Middelhoff. In all, 37,500 creditors are asking for €1.2 billion, according to the report of the liquidator. At the same time, reports of real estate sales of Karstadt stores have been coming in.

Another bankruptcy that affected the fashion industry was the end of Bread & Butter. In December 2014, the bankruptcy sounded like a drumbeat through the denim and sportswear industry. Although the show reported repeatedly about lower exhibitor and visitor numbers, the daring plans of CEO Karl-Heinz Muller polarised the denim community, and the end of the show came for many quite abruptly. But even more surprising was the news of the takeover of the fair by the Berlin e-commerce giant Zalando. His idea: Bread & Butter should continue to take place on the grounds of Tempelhof Airport in Berlin-but no more as a fair, but as a fashion event for consumers. The premiere of the new concept-that Muller had wanted to realise earlier, but had failed due to the resistance from brands-has been scheduled. But in December, the Berlin Senate decided that the Tempelhof Field and the halls of the former airport would be used as refugee shelters until the end of 2019. Therefore, Zalando now has to search for a new location for Bread & Butter. The proposed January event was, therefore, postponed.

Also, Escada struggled through the year. In July, the fashion label announced that it would have to cancel about 200 jobs in the next two years. At the company’s headquarters in Munich, some 150 employees had to go. The job cuts are part of a restructuring programme, which is aimed to reposition the company since the departure of former CEO Bruno Salzer.